Investor Relations

Commercial Bancshares, Inc.

Code of Ethics

General Philosophy

The honesty, integrity, and sound judgment of our employees and directors are essential to the reputation and success of the Commercial Bancshares family of Companies (collectively the “Company”).

This Code of Ethics governs the actions of all employees and directors of the Company and requires:

Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

Full, fair, accurate, timely, and understandable disclosure in reports and documents filed or submitted with governmental and regulatory agencies;

Compliance with applicable governmental laws, rules, and regulations;

Prompt reporting of violations of this Code to an appropriate person as identified in this Code;

The Company encourages its employees to talk with supervisors, managers, or other appropriate personnel about observed illegal or unethical behavior; or when there is doubt by an employee about the best course of action in a particular situation. The Company’s Staff Counsel may also be contacted when there are questions or concerns. The Company’s policies provide for the good-faith reporting of suspected ethical violations without fear of retaliation.

Ethical Standards

A. Fraud by Employees

The Company intends to prevent instances of fraud or misappropriation by its employees. These include, but are not limited to, the following:

Any dishonest or fraudulent act;
Forgery or alteration of any document or account belonging to the Company;
Misappropriation of funds or other assets;
Profiting as a result of insider knowledge of corporate activities; and
Disclosing confidential and proprietary information to unauthorized parties.

B. Gifts and Entertainment

Title 18 U.S. Code, Section 215, prohibits any agent, attorney, director, employee or officer from:

Soliciting anything of value from anyone in return for any business, service, or confidential information of the Company.

Accepting anything of value from anyone in connection with the business of the Company before or after a transaction is discussed or consummated.

The receipt of gifts, favors, entertainment, or payments in a business environment may have the effect of improperly influencing decision making and may create the appearance of impropriety. For this reason, the solicitation or receipt of any of the above is prohibited, with the following exceptions:

Acceptance of a gift in recognition of a commonly recognized event or occasion (such as a promotion, new job, wedding, retirement, or holiday. The Company has determined that up to $100 will be considered to be acceptable.1

1. Acceptance of meals, refreshments, or entertainment of reasonable value in the course of a business meeting, or other business occasion. The Company has determined that up to $100 will be considered of reasonable value.

Acceptance of advertising or promotional materials of nominal value, such as pens, pencils, note pads, key chains, calendars, and similar items.

Acceptance of discounts or rebates on merchandise or services that do not exceed those available to the general public.

Acceptance of loans from other banks or financial institutions on customary terms to finance proper and usual activities, such as home mortgage loans.

Acceptance of civic, charitable, educational, or religious organizational awards for recognition of service or accomplishment.

Gifts of money in any amount should never be accepted.

Any gifts offered or received over the dollar limits stated above must be reported to the Company’s Staff Counsel and approved by the board. Bribes or attempted bribes must be reported immediately to the Company’s Staff Counsel. If you have any questions as to whether a gift or entertainment is permissible under this policy, you should consult with the Company’s Staff Counsel.

C. Conflicts of Interest

Company employees and directors should avoid situations where their personal interests could conflict, or reasonably appear to conflict, with the interests of the Company. Further, any position or interest that could materially conflict with the performance of your duties or responsibilities with the Company; or that could reasonably be expected to affect your independence or judgment concerning transactions between the Company and its customers, suppliers, or competitors would be considered a conflict of interest.

Personal Financial Gain and Outside Activities

Employees and directors should avoid any outside financial interest that may influence their corporate decisions and actions. Such interests might include, among other things, a personal or family interest in an enterprise that has business relations with the Company. Conflicts may exist where an individual director or employee; or business in which such person has an interest or involvement, is providing or proposing to provide a product or service to the Company. In order to ensure that such an interest by a director or employee does not unduly influence the decision to enter into a business relationship, the following procedure shall be followed:

The individual or business that is being considered shall provide any and all documentation necessary and appropriate for the Company to complete its due diligence in considering the insider’s firm.

The Company shall seek, to the extent possible, to obtain bids from competitors for provision of the service.

The director, if applicable, shall abstain from discussions relating to the decision process and votes relating to choice of who shall be the provider of the service.

Employees and directors should also avoid an investment or participation in another business that competes directly with the Company, or which has interests that are adverse to the Company. For purposes of this restriction, stock holdings of less than 1% in a publicly traded business entity shall be deemed to be permissible.

Directors and employees are not permitted to work for a competitor as an employee, consultant, or board member. Directors and employees should not accept personal fiduciary positions or become an officer, director, owner, partner, or controlling shareholder of any business without securing approval from the Audit Committee of the Company’s Board of Directors.

In order for the Company to determine who has a possible conflict of interest relating to outstanding loans, all officers and directors shall complete a borrowing form no less than annually. This listing shall include any direct, indirect, co-signed loans and leases, and details of each such loan or lease. Further, the above listed individuals shall include all partnerships, corporations, or business ventures that they are involved and their percentage interest in each such organization

If someone feels that they may have a potential conflict of interest relating to outside activities, the Company’s Staff Counsel should be consulted.

D. Protection and Use of Company Assets

Company assets are to be used solely for the benefit of the Company. Employees and directors are responsible for ensuring that Company assets are used only for valid Company purposes. Theft, carelessness, and waste have a direct impact on the Company’s profitability. Any suspected incident of fraud or theft should be immediately reported to the Company’s Security Officer for investigation.

Assets include not only tangible, physical property, but also proprietary information such as trade secrets, patents, trademarks, and copyrights; as well as business marketing and service plans, designs, databases, records, customer information, lists of clients, wage and salary data, or plans for product improvements. These types of assets are herein referred to as “Confidential Information”.

Confidential Information

The Company’s guidelines regarding Confidential Information are as follows:

Confidential Information should be discussed with others only on a need-to-know basis.
Disclosure of Confidential Information to any outside persons, vendors, etc. should be done only in conjunction with an agreement containing the appropriate confidentiality provisions.
Employees and directors should be alert to inadvertent disclosures that may arise in either social conversations or in normal business relations with customers and vendors.
Customer account information and data must be handled in a manner consistent with the Company’s Privacy Policy.

The requirement to keep information confidential will continue even if your employment or affiliation with the Company terminates.

E. Books and Records

The Company requires honest and accurate recording and reporting of information in order to make responsible business decisions. The Company maintains a system of internal controls that it believes provides reasonable assurance that transactions are executed in accordance with management’s authorization. These controls include written policies and procedures to which employees are expected to adhere.

No secret or unrecorded funds or assets may be created or maintained for any purpose. In addition, the making of false or fictitious entries in the books with respect to Company transactions or the disposition of Company assets is prohibited, and no employees may engage in any transaction that requires or contemplates the making of false or fictitious entries.

F. Political and Charitable Contributions

The Company encourages employees to participate in activities outside of the Company, including charitable or political activities. However, federal law prohibits the Company from making political contributions. Employees are free to make voluntary personal contributions to political action committees, candidates, and political parties; but are prohibited from using Company funds or from making such contributions on behalf of the Company. Employees are also prohibited from soliciting other employees for political contributions.

G. Pre-Employment Background Screening

The Company endeavors to employ highly qualified and ethical individuals. As part of the process of determining such potential employees out of a pool of applicants, the Company has implemented a written policy and procedures that include obtaining a criminal background check and verifying an applicant’s elibibility for employment by an insured financial institution. Enhanced screening processes may occur for those applying for positions involving greater access to the Company’s more sensitive Confidential Information.

H. Reporting of Illegal or Unethical Behavior

If you become aware of any suspicious activity or behavior, including concerns regarding questionable accounting or auditing matters, you must report the suspected violations of laws, rules, regulation, or this Code to Michael Shope, Chairman of the Audit Committee, at 419-668-6768. Reporting the activity will not subject the employee to discipline absent a knowingly false report. All calls are anonymous and confidential.

I. Action for Non-compliance with this Policy

Failure to comply with this policy may result in disciplinary action, up to and including termination of employment or affiliation with the Company.

Waiver of Code of Ethics

Any waiver of this Code may be made only by the Company’s Audit Committee and will be promptly disclosed as required by law.

Annual Training

All employees and directors shall receive training on no less than an annual basis on the requirements and limitations of this policy.

Annual Acknowledgment

It is the responsibility of the Human Resources Department to obtain a reaffirmation of this Code of Ethics from all employees annually. Affirmation of this Policy shall also be obtained from all new employees at the time of employment.

Internal Audit

The Company’s internal auditing firm shall conduct periodic audits to test whether internal controls against self-serving practices and conflicts of interest are adequate and effective in preventing such activity. The audit should identify operational weaknesses so that any necessary corrective action may be taken to ensure compliance with laws, regulations, and the Company’s policies.

This policy was approved and adopted on January, 2010.

Acknowledgement of the Code of Ethics

The undersigned hereby certify that they have read the foregoing Commercial Bancshares, Inc. Code of Ethics Policy, understand the requirements set forth in the policy and potential penalties for violations, and agree to abide by it.

Signature Date

_____________________________________ ____________________________

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